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Bank backs financial reforms
The Asian Development Bank has approved a US$60 million loan for Viet Nam to expand financial sector reforms that have been instrumental in the country's sustained growth and poverty reduction achievements.
The loan, provided for the second phase of the Third Financial Sector Programme, is targeted at the development of the non-bank financial sector, including the securities and bond markets, strengthening of regulations to enhance transparency and provide investor and consumer protection, and overall financial stability.
"The results will be a more diversified and resilient sector with an increased share of capital-market financing of domestic investments to support economic growth," Hasnah Omar, Senior financial sector specialist in ADB's Southeast Asia Department, said on Monday.
Financial sector reforms, which have paved the way for increased private sector business activity, investment, and job creation, have been a major factor in driving growth and helping Viet Nam slash its poverty rate from 58 per cent in 1993 to around 14.8 per cent in 2008.
The new assistance will help the capital markets increase their share of financing domestic investments, and reduce the funding mismatches that can occur with commercial bank loans.
The 24-year loan has a grace period of eight years with an annual interest rate of 1 per cent during the period. For the balance of the term, it will rise to 1.5 per cent. The State Bank of Viet Nam is the executing agency for the programme.
VIETNAMNEWS
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